Sussan Ley says $1bn shortfall from abandoning the measure will need to be found elsewhere.
Photograph: Mick Tsikas/AAP

Sussan Ley has conceded the government does not have the support to get its $1bn budget savings measure on subsidised medicine through the Senate.

The health minister backed away from a suite of measures relating to the pharmaceutical benefits scheme, including the proposal to charge general patients a $5 co-payment for scripts and to increase the amount patients must spend on medicines before being eligible to get them free or cheaper.

The retreat comes less than a fortnight after the government presented the measures for a second time in the federal budget.

“I have spoken with crossbenchers about the 2014/15 measure to increase the PBS patient co-payment and safety net,” the health minister said. “Obviously the government has to negotiate all legislation through the Senate and ... initial indications are that the cross bench does not support the measure in its current form.”

But Ley warned the $1bn shortfall from abandoning the measure will need to be found elsewhere.

“Like all ministers, I am applying the principle that a saving doesn’t come off the table unless an alternative saving goes on. This is the responsible thing to do and I will continue to work with the parliament to ensure we live within our means.”

“If [savings] not found in a way that is responsible and fair, then you’ve got to find another way that is responsible and fair. So, it’s not going to be affecting the budget bottom line because the minister has to find the savings in other areas,” Hockey told Channel 7.

“We would ask senators to be equally responsible in return. Please don’t spend taxpayer money on the credit card. Please ensure you have the savings to help pay for it.”

Labor said the PBS changes were still on the table until other savings could be found, amounting to Ley “backflipping on a backflip”.

“She has been forced to back down because Joe Hockey knows that she blew a $1.3bn hole in the budget,” shadow health minister Catherine King said. “The health system deserves better than a government that is in chaos when it comes to health care, and it is making policy on the run.”

Currently, general patients must reach a threshold of $1,454 a year on drugs before being eligible for cheaper subsidised drugs. The proposed changes, first introduced in the 2014 budget, would see that safety net increased by 10% a year over four years. Concessional patients would also have to pay more for their medicines.

Ley on Thursday indicated negotiations on the changes had stalled.

“I am not going to waste time putting things through the parliament that are going to be voted down by my colleagues,” she told reporters.

The government has added medicines worth $1.3bn to the PBS, including breast cancer and melanoma treatments and vaccinations for shingles for senior Australians.